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tv   Bloomberg Technology  Bloomberg  February 23, 2024 11:00am-12:00pm EST

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announcer: this is bloomberg technology. caroline: nvidia tops $2 trillion in market value. plus, read it's filing -- reddit
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's filing to go public. carvana shares pop after the retailer defied challenges to post a solid '23. we will sit down with the companies ceo. the s&p broke new territory. nasdaq off. european bonds, tech stocks powering up the stoxx 600 to a record high. u.s. 10 year off three basis points on the day. we are basking in glory of nvidia earnings. they have clawed their way to to join dollars market capitalization -- $2 trillion
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market capitalization. intuitive machines got its lunar participation going yesterday, landing on the moon for the first time in 50 years. we will dig into that. not all earnings are glorious. we will dig into warner bros. later. peeling back these narratives on the ai boom, erica is with us. or read on tech, nvidia. interested whether you think the hype has reality underneath it.
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will we see a broadening in terms of a i love? >> yes. jenison has a long-term outlook. we've always been positive and early. all of our expectations have been blown out of the water. caroline: jenison is an operator. he managed to beat a global business. extraordinary. this company is finding working with china more difficult, largely because of geopolitics. erika: political landscape is more challenging for companies now, as they have restrictions. china had risen to 20% of
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nvidia's datacenter revenue. that contracted down to 5% in the recent quarter. nvidia has been nimble in terms of coming out with products that comply with export laws. those will ship later this year. we believe there is pent-up demand for those chinese customers. caroline: is there room for the other rivals? should we look to other makers? erika: our view is yes. nvidia has opened the doors for many others, from computer companies like advanced micro devices and broadcom to storage companies and networking companies and software companies that are able to harness this computer power to deliver software that enables gains in
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productivity and innovation. caroline: is there anything that gives you pause, $2 trillion valuation, or china, or running out of road of exuberance, or do you go back to forward ratios that make the company look attractive? erika: we china to take a long-term view. we've written white papers about this. over the entire infrastructure, we see it as a $1 trillion opportunity today. the innovation is expanding that. we are 15% penetrated at this point. we see opportunity ahead for further penetration of markets, updating this brand-new way of compute, known as parallel
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process-ism. caroline: the vc community is looking at the underlying compute and large language models, but they also look at the applications of ai. what's the industry perspective? erika: there are obvious places. hyper scalars recommending with more accuracy and target. amazon, google using tools to improve recommends. big new opportunities that have emerged unexpectedly in 2023 and are accelerating would be the health care industry where companies are using this technology for faster drug development times. also we've seen extraordinary interest in sovereigns. countries saying we want our own version of chatgpt in our own native language.
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they have their own concerns as regards to oversight. they are looking for u.s. counterparts. caroline: how about the cyber angle? felt like that was a tailwind for cyber stocks, then you get palo alto, and they are not going to factor in quickly. is there any part of the tech space that is overdone? erika: we see a tale of haves and have-nots. companies that may be facing challenges with regard to pricing. cybersecurity. there are so many flavors of where it exists, your phone, your computer, your enterprise, within the internet.
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one has to be careful in looking at players, where they exist, whether or not they have pricing power and the sustainability over a long time. caroline: is your focus on the u.s. being the outperformer here, there has been ongoing narrative on whether china or the u.s. is ahead on ai. european stocks, japanese stocks are on record highs. erika: the predominance of opportunities are in the u.s., however, there are incredible opportunities overseas. ksm lithography has a dominating position in this essential tool, to make the next generation of semiconductors, as well as the older generation.
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this is incredibly innovative, reflected in their margin profile, free cash flow margins. we find opportunity overseas. the majority of innovation is in the u.s. today. caroline: fantastic. thank you. come back. have a wonderful weekend. all the big hitters of the week. coming up, another one, which might become public. all the details on the company long waiting to get public. let's check in on walmart, up .6%. flat on the company looking to acquire. vizio, a warning bell, according to elizabeth warren.
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she put this in a post, but they will be looking to extend that dominance. walmart gained on strong results earlier in the week. this is bloomberg. ♪ were you worried the wedding would be too much? nahhhh... (inner monologue) another destination wedding?? we just got back from her sister's in napa. who gets married in napa? my daughter. who gets married someplace more expensive? my other daughter. cancun! jamaica!! why can't they use my backyard!!
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caroline: potential ipo's. reddit publicly filed. there will be a test. katie, you been tracking this. we've got to grips that the
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company is not yet profitable. reporter: true. $800 million annual revenue. they're not profitable. losses are shrinking and revenue is growing. not profitable. they're hoping this new ai partnership will excite wall street. the partnership with google, they are thinking this is the time to announce this will scrape their data from reddit will excite the street. caroline: sam altman is a big shareholder. who's going to be winning? this was a down round compared to the last one. are we anticipating liquidity events for key vc names?
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reporter: bloomberg reported they may be valued at $5 million when they go public. remains to be seen. a lot of this was decided the night before, based on how the market is trading. they've been around since '05. early shareholders are no longer major investors. this has been a long time coming for some. some of the early names, like the founder, he wasn't even on the prospectus. he didn't make the cut for a 5% shareholder, which is required to see the filing. they've been around 19 years. a lot of the original shareholders, i imagine, sold shares on the secondary market
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and got early liquidity. caroline: advance magazine, the new house family, plenty of other publishing set to be a key earner in this event. thank you. the secondary market. how active it is. we've got breanne lynch with us. how active have they been in the secondary market? >> they've been a popular name over the years. this is a 19-year-old company so there has been a lot of demand for liquidity from early shareholders over time. they attended the offer in '21. there is still a lot of demand for liquidity that will come via
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the ipo. what we've seen from trades that have been reported in the secondary market recently, a the fact that they are eyeing this, tends to make sense because they traded a discount in the private market. caroline: is this going to be retail? reddit became synonymous with meme stock investing. will institutional players be interested in a company not yet posting profits? brianne: they are betting on their being retail interest in the name. in their s1, they say there is retail interest causing volatility in the stock.
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the fact they are issuing shares to 75,000 power users or allowing them to buy into the ipo will also create volatility. there is no lockup. they will allow the shares to trade freely. they are expecting retail activity which isn't likely to increase volatility of the stock, especially early days. the institutional investor, i think you are right. overtime, institutions are less interested in unprofitable companies. reddit is interesting. they are 19 years old. they didn't start monetizing right away. that engine is young and unproven. advertising is 98% of that now. there are opportunities for them on the data licensing front. google partnership. a lot of that is forward-looking and unproven. i'm curious to see how
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institutions take that into account. caroline: stephen huffman, still driving that new iteration. where's the risk factor in cozying up with large language model makers, the big tech firms that want to scrape data? brianne: we've heard this from the community. there's been pushback about this. it's human conversations needed to train models. reddit has billions of posts/comments that are the exact type that will help train models. there could be backlash from users on the platform. it's a huge monetization opportunity. the $60 million contract with google makes up 7.5% of current revenue. if they can replicate this with
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others, it could become a sizable part of the business. interesting thing. these language learning models could hinder their business. if people go to chatgpt instead of reddit to ask some question, reddit may lose users. it is a double-edged sword. caroline: when analysts try to decide who their competitors are, are they immediately looking to alphabet, meta, other social platforms? brianne: those are the obvious competitors. this market has gotten more competitive as ad dollars have been pulled back. what they are trying to sell investors on is the fact they can allow advertisers to reach a more niche target audience.
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sleeping bag manufacturer, you want to talk to people who are camping. we want a conversation of thousands of people talking about this. the ability to convert people, from their own research they have shown 61% of their users say they are more likely to trust and add that comes from -- an ad that comes from reddit. they may have an edge, even though their audiences are much smaller than these other platforms. still early proving that out. caroline: great to catch up with you. thank you. some activity on the secondary market. other public stocks. warner bros., the worst performer on the nasdaq 100 today. advertising sales, traditional
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tv channels are weakening. fewer new programs being released following the hollywood strikes last year. so much to dig into. block, real outperformer on the day. square, previously known, jumping as much as 23%. the payment tech company raising the forecasts going forward. upgrading. meanwhile, flat trade on intuit. concerns on credit,. it's worried about headwinds. still forecasting revenue growth could be capped by cautious spending among small businesses. this is bloomberg. ♪
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caroline: cruise is nearing resumption of robotaxi testing in houston and dallas. before the suspension, the company had hundreds of cars in san fran and phoenix. the investment firm that handles tsai sold 83% of remaining shares in blue owl. some other shares being hit. warner bros. discovery,
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fourth-quarter revenue profits fell short of estimates. the stock at a record low. weakness in linear tv. was there any area that was good? >> things weren't that bad in their direct to consumer streaming business. it was not profitable. for the full year, it was profitable. the losses were lower in the fourth quarter. subscribers were better but not dramatic. they are way behind netflix and disney. caroline: all of this highlights the dire straits that the ecosystem finds itself in. there will be m&a and consolidation. chris: the ceo was candid on the call. the challenges.
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traditional is down double digits. the strikes hurt them. the actors and writers being not working. that studio business was down. warner bros. had a push in december releasing three big movies at once. it was bold. revenues were up but profits were down. aquaman disappointed. there's a lot of superhero fatigue. there is work to be done at these traditional companies. caroline: appreciate it. coming up, what feels like a movie. intuitive machines. lander nicknamed odysseus touched the moon. more details next. we are off in asia trading, they slid the most in nine months
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after revenues were well below estimates. this is bloomberg. ♪ thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at
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caroline: quick check on markets. we've eclipsed new ground on the s&p. lackluster nasdaq 100. we moved far and fast yesterday off nvidia. maybe we will push back up toward the close. bitcoin off.
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risk assets feeling pressure on the day. across the board, nvidia, what it means, the company powered through a 200% increase in revenue, delivering a valuation still pleasing at the 33 level. will we get $2 trillion on the day? let's focus on the company that will eventually be on the public markets. reddit filing yesterday after the bell. he's everywhere. sam altman was listed as one of the major shareholders. we shouldn't be surprised. he was the interim ceo for eight days.
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why does he hold so much stock? >> he led the series b $50 million in '14. he's sitting alongside the advanced magazines publishing entity that owns 34%. the newhouse family bought redd it in '06, and then spun it out in '11. this is an ipo for the moment. ai, sam altman, advertising, large language models, partnerships with google and such. caroline: there comes a time
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when markets are near record highs. european stock markets are at a record high. what does the narrative have to be to ensure we don't question the cap too much? $5 billion is a huge markdown. ryan: it is. much of the talk on testing the waters has been around let's not get ahead of ourselves. let's be realistic. the first one we have had in a while, this is a different breed. a storied journey. the banks and investors are coming together, let's not push this hard. let's not end up in a situation where we have bitten off more than we can chew. reddit wants to get past this history it has had of waiting
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and waiting and waiting. it wants to get on being public. caroline: the ceo wants to get on, having birthed it in '05, still being the ceo. now turning to the moon. american-made lander touched the moon for the first time since the apollo era, last night, after a string of obvious failures, making it the first private spacecraft to reach the surface intact. the lander built by intuitive machines reached it at 6:23 p.m. new york time on thursday. >> commercial enter, odysseus, powered by a company called intuitive machines launched upon a spacex rocket carrying a
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bounty of nasa scientific instruments and bearing the dream of a new adventure. caroline: lauren, this shows us the reality of the way in which nasa is now working. it is turning to private companies and not just spacex anymore to make space cheaper. lauren: they want to go back to the moon in a different way. they are bringing companies with them. this is a great example of the paradigm shift. this was a publicly traded company but a private sector entity landing on the moon. they received developing funding from nasa, less than $18 million, but they also had to raise capital. caroline: we see a market cap of
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more than one million for intuitive. we are up 28%. what are we anticipating that is achieved? loren: there are two goals with this. this was the first mission to land closest to the south pole of the moon. the south pole is enticing for nasa. it is thought to have water ice. they are curious if we can go there to mine that ice. it is where nasa hopes to land future astronauts when they do return to the moon. the idea is nasa wanted to trigger the development of the commercial lander so the company could have a way to transport nasa payloads but also use the
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lander to create their own business, transporting experiments and payloads to the moon. that lander also had commercial customer payloads on it. can it be sustainable moving forward? caroline: who knows what jeff koons art piece will be doing rolling around on the moon after this? what are the other names? we put so much exuberance on space x. we now look at intuitive machines entering the lexicon. who's out there? loren: another company considered is the arrival of intuitive called astrobotic. they were another partner with nasa through the same program. they launched in january but suffered engine failure after getting into space which precluded their chances of attempting to touch the moon.
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they brought the lander back to earth and disposed it in the atmosphere. they will try again. they have another mission lined up. intuitive has more missions lined up. firefly airspace is partnering with nasa. nasa is looking to dole out funding to those who want to make a business going to the moon. plenty of companies are interested. as this return to the moon gets mature, there will be even more opportunities for companies. caroline: we will turn to you in those moments. thank you. coming up, all the details, how disputes within klarna have spilled over into a high-profile drama. rivian shares drama, long-term shareprice chart, down almost 90%, on the back of lackluster
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earnings posted after the bell wednesday. yesterday the stock fell hard, they said they would let go of staff as well. this is bloomberg. ♪
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caroline: vc drama brewing. sequoia named a new board member for klarna in an effort to calm issues between the founders. extraordinary story. what's going on? what's the spark of the issue?
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>> ugh, it's a mess. what happened is unclear. there was some dispute at klarna about governance or control issues and sequoia's partner, on the board, matt miller, saw things one way, and michael moore it's, legendary vc, was until very recently a partner at sequoia, saw it another way, the upshot is michael moritz still has his board seat, he now runs sequoia heritage. matt miller is out. that is head spinning. hopefully it makes sense. caroline: drama seems to have unfolded between the cofounders.
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how often were not does drama occur? it feels rare. money is involved. things get dramatic. >> klarna is doing well. it had hiccups, as many did, over the past couple years. basically, it's a richly valued company that should be headed for ipo. when this type of drama unfolds, it's usually behind the scenes. whatever disagreements happen at board level rarely make it beyond those doors. then when they do, to have two partners affiliated so closely with one firm have a dispute like this, is almost unheard of. people are surprised. more than anything, at how word of it became so public.
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the ceo ended up having to fly to silicon valley to make amends and smooth things over with sequoia. sequoia had to appoint a new board member. it's all gotten unusually messy. caroline: sequoia itself is transitioning new leadership and splitting from its china division. a whole host of stories going on right now. let's stick with vc. a slightly calmer part of it. wonderful to have you with us. this week, what i've heard at a conference is consumer tech is dead. don't go near it. for now we all have to be in health care, climate activist ai.
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you don't think that's the case? >> thanks. pleasure. i am a partner at headline, a tech enabled global venture capital firm where i focus on consumer-oriented investments among other things. we've had the good fortune to lead consumer investment like bumble, axios, far-fetched, among others. you are right. you have to look behind the front page here. past the rumor mill. look at faang. it's all consumer. the most valuable companies in the world are consumer companies. apple, amazon, tesla, facebook, snap. going forward, we think that will continue to be the case, given this generational tech
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shift with ai. caroline: let's get specific. tesla and snap have faced headwinds to share prices, ultimately in consumer demand headwinds stymieing growth. notable companies but far-fetch has had a terrible time. e-commerce may be a hard place to be. where's the place to be when you want exposure to a consumer that is still there buying stuff? jett: great point. consumer companies that have historically relied on paid customer acquisition are facing headwinds. we are excited about the opportunity to partner with companies that have real distribution advantages. what i mean is companies that leverage benefits of community, content, celebrity or creators.
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we are seeing more companies come up in the world of tiktok, teemu and others that leverage those distribution advantages beyond solely paid acquisition. caroline: anticipating more celebrity beauty brands? jett: certainly there will be more, absolutely. that's one way companies can find real distribution. utilizing see liberty creators -- utilizing celebrity creators and the content community. caroline: we will see which ones manage to find the fit. headline ventures, great to catch up with you. truly global perspective. this company is everywhere. this is bloomberg. ♪
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caroline: carvana shares rocketing. reported profits past estimates, avoiding headwinds from high interest rates and inflation. any garcia.
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-- andy garcia. 31% higher. you've had to shift gears to profits at all costs. what have you been doing? >> you start to see results come quickly but there is work that goes in before. 2022, the wind shifted quickly for us and everyone else. the team came together with a plan that we thought made sense in the moment with the new pressures out there. the team executed over the last two years and we see that now. the results we reported are something we are excited about. it's the result of the team coming together doing incredible work. thank you to the team. caroline: some analysts talking
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about the steep increases in profits and the return to unit growth. some people would say there is this uptick because it is squeezing out some of the shorts. you were heavily shorted. ernie: there is room in the world for shorts. skepticism is helpful. it creates pressure. one of the ancient greek philosophers, haters going to hate, players going to play but me i'm going to shake shake shake shake it off shake it off. caroline: ernie. ernie: forgive me. caroline: she has a way with words. the debt market, we are focused on bonds in particular. how are you thinking about paying down debt? ernie: most important thing we
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do is deliver great experiences to customers. it was hard one year ago to see the incredible gains the team has made over the last year. those were possible because the offering we give is unique. the business we built is hard to replicate. the team we assembled is incredible. our job is to take advantage of those things. caroline: you talk about the team. it's hard to think about scaling back or reducing headcount. is that something you have to think about in the future? ernie: the team is in a great spot. 2022 was tough. we had to make adjustments. the team is in a great spot. one of the things we did a good job with was we were able to make tough decisions, move forward and do the hard work to put ourselves in the position to
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succeed. this team is battle hardened. every time you bring it up, i will say thank you because i could not be more grateful. caroline: where the consumer is at, from your perspective. you've been able to take a car you are shifting, consumers have bought a lot of secondhand vehicles. how do you outperform competitors? ernie: this is a mature industry. every year, 40 million used cars are transacted in the u.s. there are 270 million cars out there driving around. this pushes us to swap. the entire industry is about finding moments where one customer wants to switch, then making it as simple and cost-efficient as possible.
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that is what our business is designed to do. we built a new supply chain, capability, supported by technology, so it is simple for the customer. as long as we deliver that experience that gives them the best price, best selection, best experience, we are in a good spot. we grew from a seed in 2013 to where we are today by doing that in a market that was flat. there have been nice tail winds today. lowering car prices, which were high for several years. it was tough for consumers. overall, our goal is to keep delivering great experiences and take market share. secondarily, the market will do its thing. caroline: the market will do its thing. you do your thing on tv with us,
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we appreciate you being with us. jamie dimon has been letting go of shares. $150 million of jp morgan shares in first sales. this is bloomberg. ♪ or filing returns. avalarahhh ahhh at morgan stanley, old school hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real.
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sonali: from new york city for our viewers worldwide, i'm sonali basak. "real yield" starts now. ♪


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